5 ms·
Would be slightly more insightful if it was inflation adjusted. The circles on the right should be ~30% smaller.
by kypro 3y ago
Would be slightly more insightful if it was inflation adjusted. The circles on the right should be ~30% smaller.
- smashem 3y agoAnd how about relative to M1 money supply?
- littlestymaar 3y agoComparing to M1 doesn't make much sense, but “total bank assets” roughly doubled in the meantime: https://fred.stlouisfed.org/series/TLAACBW027SBOG https://fred.stlouisfed.org/series/TLAACBW027SBOG
- _heimdall 3y agoThe definition of M1 and M2 money was changed in May 2020, conveniently right as the government started printing money for their pandemic response.
- kasey_junk 3y agoBut inconveniently long after savings accounts started being demand deposits due to online bill pay, atms and easy access to electronic funds transfers. If you are going to complain about changing the definitions you should complain that they did it too late.
- _heimdall 3y agoYep you raise a great point, but I'm not quite sure how I'd peg the "right" time for them to have changed the definition. Whenever the definition is changed at a minimum it means historical data can't be compared easily across the different definitions. My main point here was simply that comparing M1 or M2 money between now and anytime prior to May 2020 is likely not a useful number.
- vukadinovic 3y agoI was thinking the same!
- bobbylarrybobby 3y agoAnd if the circles’ areas, not their radii, were the failed assets. As it is, a circle’s apparent size (we judge 2D shapes by their area, not any one linear dimension — although this is difficult to do in practice, and linear marks are generally superior) is the failure size squared, which distorts the data a boatload. Here is a, er, more faithful representation of the data. The recent failures don't look quite so crazy anymore! https://observablehq.com/d/d85ce0c639bc4df7 https://observablehq.com/d/d85ce0c639bc4df7
- JBiserkov 3y agoThey still look pretty crazy to me! https://www.fdic.gov/bank/historical/bank/index.html https://www.fdic.gov/bank/historical/bank/index.html Total assets of banks failed in 2008 + 2009 => 373 + 171 = 544 Billion Total assets of banks failed in 2023 (so far, still 2/3 to go) 548 Billion
- littlestymaar 3y agoThe total bank assets doubled in the meantime (from 11-12TN to 23TN)[1] so proportionally it's half than 2008 + 2009, but that's still gigantic. [1] https://fred.stlouisfed.org/series/TLAACBW027SBOG https://fred.stlouisfed.org/series/TLAACBW027SBOG via https://nitter.lacontrevoie.fr/2Steady4U/status/1653374757541126148#m https://nitter.lacontrevoie.fr/2Steady4U/status/165337475754...
- mbo 3y agoI have also built an alternative as a stacked bar chart https://observablehq.com/@mjbo/bank-failures-as-a-stacked-bar-chart https://observablehq.com/@mjbo/bank-failures-as-a-stacked-ba...
- rerdavies 3y agoThe circle version is terrifying. The stacked bar chart is even more terrifying.
- 3y ago
- ajross 3y agoIt's also leaving out non-FDIC bank failures like Lehman, Bear Stearns et. al. which would make the '08 crisis much (MUCH) larger. Basically post-2008 the class of "investment banks" basically disappeared. But none of that is shown in this chart.
- ivalm 3y agoThey didn't hold deposits. So it's kind of reasonable. They are called "bank" but they aren't the same kind of institution.
- dtech 3y agobut it's misleading. The financial crisis was basically triggered by those, and not by the ones shown here in 2008-2009.
- bhaak 3y agoBut they held "value" that was "gone" from one day to the other which triggered the financial crisis. In reality they weren't worth anything but the realization that those values were worthless was the trigger. But those values were on the balance sheets and should therefore be visualized as well.
- ajross 3y agoOnly where "deposits" are defined as FDIC-insured consumer accounts. Clearly they held other people's money for them, which is pretty close to the economic definition of a bank.
- NoboruWataya 3y agoI can understand why these banks were omitted but it completely changes the picture. Lehmans and Bear Stearns were the bank failures of 2008.
- ekianjo 3y agoAre you trying to say that the current crisis is nothing ? These are famous last words.
- Buildstarted 3y agoThis person adjusted the values for inflation https://twitter.com/viralhysteria/status/1653369995877908481 https://twitter.com/viralhysteria/status/1653369995877908481
- bitslayer 3y agoIf we are comparing the impact, shouldn't it be adjusted for the size of the economy? The U.S. GDP was under $15T in 2008 and is over $23T today.
- miclill 3y ago"More insightful" is too gentle. At best the chart is misleading. But the _mistake_ to not adjust money for inflation is very common unfortunately...